Interest rates on hold again but distressed sales inevitable
The Reserve Bank of Australia (RBA) today announced its second pause in a row, giving borrowers a reprieve for the time being.
By Ian Pepper of Ray White Helensburgh
The Reserve Bank of Australia (RBA) today announced its second pause in a row, giving borrowers a reprieve for the time being.
The RBA cash rate will remain at 4.1% with the average home loan now anywhere from 5% to 6.5%.
There was some talk that the outgoing governor, Philip Lowe, would pass on one more rise before handing over to the new governor next month. However, common sense has prevailed, with mounting evidence of households struggling under mortgage and high cost of living stress.
We are now experiencing evidence of this stress in the local market, especially with investors.
According to CoreLogic, investor-owned listings ballooned to 40% of all new Sydney listings last month. And it is easy to see why, with mortgage rates up 4% in one year, council rate hikes and higher land tax bills crippling even cashed-up investors.
So, in the coming months we may see more of these listings in our area and perhaps also some struggling owner-occupiers who purchased in the pandemic phase with booming prices and higher borrowings at low interest rates.
About the author
Ian Pepper has had a long and distinguished career as a finance and real estate professional. Originally trained as a Chartered Accountant in 1995, Ian worked in Sydney and London. He has an MBA from Macquarie Graduate School of Management and now sells real estate with Ray White Helensburgh. Ian also volunteers with local community groups including school P&Cs, sporting clubs and business chambers.
